I'm not surprised at all. Etsy used to be user based and hand made. Now it's just another market place. They still act like they try to enforce "non-mass-produced" but there are countless examples of the opposite being true. Places where people have directly reported instances of this and the problem is still present.<p>I think the problem is that they stopped caring about their user base and, therefore, became less ubiquitous and people saw that and were like "oh.. time to value them lower.."
As they always say, this time is different.<p>My opinion is that the tech sector has greatly expanded since 2000, not just in amount of investment available, but also types of business tech companies are actually in.<p>So maybe there is a web/ad bubble and it might pop, but how much that affects individual company is more nuanced.<p>Unsophisticated investors might still lump Google/Twitter/Tesla/AMD into the same "tech sector", but they will find the signal they receive is very mixed and difficult to analyze.
The lockup agreement expired. Looks like employees and executives are selling up big time.<p><a href="http://www.marketwatch.com/story/etsy-shares-fall-after-expiration-of-lockup-agreement-2016-01-11" rel="nofollow">http://www.marketwatch.com/story/etsy-shares-fall-after-expi...</a>
I wouldn't be surprised if Etsy is acquired now that the share price is beaten down. Seems like a good fit for eBay (it would provide much needed relevance) or Amazon. It's a good brand name, but not much else.
"over-hyped gimmicky thing trendy with hipsters out-of-touch with reality starts to fail over short period of time"<p>not surprised one bit. i echo the sentiment of other commenters who give other examples.<p>this is only surprising if you are also out of touch with reality
And they're actually a better value today thanks to the proper correction, than they were at the point of IPO, despite what the analysts and pumpers (or shorts) would tell you.<p>Now they're trading for 2.x times sales for fiscal 2015. They have 1/3 of their market cap in cash. And they're accumulating cash from operations rather than burning it. The value proposition on the stock is dramatically higher than it was when the hype was on the moon.
This doesn't bode well for other publicly traded B corporations, unfortunately.<p><a href="https://en.wikipedia.org/wiki/Benefit_corporation" rel="nofollow">https://en.wikipedia.org/wiki/Benefit_corporation</a>
speciality ecommerce has always been a moody market and a company like Etsy getting traded at this value is still just sentimental value. The company has had negative margins for a while, along with negative returns on all it's assets.<p>Operating cash flow is a mere 2% of the current market cap. This defines shambles unless it can really turn it's fortune around in '16-17.
etsy is clear case of poor management, just taking a brief look at their financial statements it is clear they are doing something clearly wrong. Their revenue is growing but their expenses are growing at the same rate so they remain unprofitable. from 2014 to 2015 revenue grew from 29 million to 45 million per quarter while general expenses grew from 22 million to 31 million. Amazon is another company that does this but at least they have the sense to keep the company slightly in the black to slowly gain small amount of cash reserves, etsy is just burning through their capital for no reason, they earn plenty of revenue to be able to turn a profit
They can obviously make money by raising a transaction fee a little bit from 3.5% to maybe 5%-7%. eBay has done it to 10% + PayPal fees and they are making billions in net profits.
To be clear, it's lost XX% of it's market cap. The market cap is a knowingly-flawed assessment of earnings potential for a company. Its actual value is probably unchanged.
The stock should trade at $2 if you look at their financials. Growth stalled a while back. Etsy will never be able to compete with Pinterest. This is a $100 million dollar company in the guise of $1b. Going the same way as gilt group.
All comes down to Monetization really.....If you dont find a good way to make a profit stock price will fall. Investors will only wait a certain amount of time before losing faith and interest.
as a two-sided marketplace, etsy got a wrong balance between vendors and buyers... Last time I did read they speaking about making a lot of money offering vendors' services... They abandoned the crowdsource, the crowd abandoned them..
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